Summary of BMW of North America v. Gore
Facts: Prior to shipment to the US, at least 1000 new BMW cars were damaged by acid rain. BMW had the cars repainted and sent to the dealers without telling them of the repaint job. One driver Dr. Gore brought suit against BMW on behalf of nearly 1000 other BMW owners.
Procedural History: Gore brought suit in Alabama state court on behalf of himself and nearly 1000 other BMW owners. A jury found for Gore that BMW did violate the non-disclosure policy adopted in 1983, and decided that there was $4000 damage to each car, and also awarded $4M in punitive damages to BMW. BMW appealed, and the Alabama Supreme Court found that to be excessive and modified it to $2M. BMW filed petition for certiorari.
Issue: Does an Alabama court’s imposition of $2M in punitive damages for nationwide conduct violate the due process clause?
Holding: Yes. Fairness dictates that BMW should have notice of the severity of penalties for its wrongful conduct.
Judgment: Reversed and remanded back to the Alabama Supreme Court for a decision on a new award or a new trial.
Reasoning: The Due Process clause protects tortfeasor against “grossly excessive” awards. The $2M award was excessive based on 3 guideposts, 1) the degree of reprehensibility of the nondisclosure (cosmetic damage, economic loss), 2) disparity between harm suffered and punitive damage awarded ($4K vs $5M), and 3) the difference between civil/criminal penalties and the punitive remedy. In each criteria, the $2M award was excessive.